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Ganga Sugar Corporation Ltd. Vs. Commissioner of Income Tax. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberI.T.R. No. 614 of 1973
Reported in(1977)6CTR(All)177
AppellantGanga Sugar Corporation Ltd.
RespondentCommissioner of Income Tax.
Excerpt:
- .....by the sur tax officer was valied in law.4. the provisions for taxation and dividend not being reserves, were rightly not included in the capital base of the assessee for statutory determination of 'sur tax'.6. as the aforesaid answers are partly in favour of the assessee and partly in favour of the revenue, we direct the parties to bear their own costs.
Judgment:

D. M. Chandrashekhar, J. - We have heard Sri A. N. Mahajan for the assessee and the learned Standing Counsel for the Income Tax Department.

2. The facts of the case having been set out in the statement of case it is unnecessary to repeat them.

3. The Income Tax Tribunal has referred to this Court the following four question of law :

'1. Whether, on the facts and in the circumstances of the case, the amount of interest paid by the assessee company under S. 3(3) of the U.P. Sugar Cane (Validation) Act, 1961 was allowable expenditure ?

2. Whether interest charged under S. 3(3) of the aforesaid Act was a penalty for infringement of law ?

3. Whether the assessment order passed by 'Sur Tax Officer' was valid in law ?

4. Whether the provision for taxation and dividend being the reserves should have been included in the Capital base for Statutory Determination ?'

The answer to question Nos. 1 and 2 above are fully covered by the ruling of this Court in Kamla Pat Moti Lal vs. Commissioner of Income Tax.

4. The answers to questions Nos. 3 and 4 are also fully covered by the ruling of this Court in Commissioner of Income Tax vs. Hind Lamp Ltd.

5. Hence our answers to the questions referred to this Court are as follows :

'1. On the facts and in the circumstances of the case the amount of interest paid by the assessee Company under S. 3(3) of the U.P. Sugar Cane Cess (Validation) Act, 1961 was an allowable expenditure.

2. Interest charge under S. 3(3) of the aforesaid Act was not a penalty for infringement of law.

3. The assessment order passed by the Sur Tax Officer was valied in law.

4. The provisions for taxation and dividend not being reserves, were rightly not included in the Capital base of the assessee for statutory determination of 'sur tax'.

6. As the aforesaid answers are partly in favour of the assessee and partly in favour of the Revenue, we direct the parties to bear their own costs.


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